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Standard Offer Program: Questions to Ask When Considering Selling Electricity
It’s an exciting time in Ontario ’s electricity sector. The provincial government recently opened up the marketplace to welcome and encourage small, renewable energy projects. Through the new Standard Offer Program (SOP), small generators can sign a contract for up to 20 years to sell clean electricity (those using selected renewable resources like solar, wind, small hydro and some biomass) to the Ontario Power Authority and receive a guaranteed price per kilowatt hour.
Details of the SOP are still being finalized before the program launches later this Fall. If you are interested in setting up your own renewable generation business when the SOP takes effect, there’s a lot to consider. Starting any type of enterprise requires careful preparation. Due to the risks and important safety, technical and regulatory requirements, this is particularly true in becoming an electricity generator. Some of these issues are discussed in the OEB fact sheet Standard Offer Program: How to Get Connected.Standard Offer Program: How to Get Connected
Here are some basic questions to ask yourself from the outset:
- Which renewable resource(s) will be used in your proposed project and does it qualify for the Standard Offer Program?
- What type of equipment is needed?
- How much energy is your project expected to produce?
- What are the set-up costs to build and design your project?
- What approvals are required to construct and operate your project?
- What are the connection costs to plug into the power grid?
- Have you considered other business/administrative costs/fees involved?
- Who is the local electricity distributor you would need to deal with?
- What is the process to connect to the distributor’s system?
- What regulations, rules and codes do you need to review and follow?
- What’s the payback timeframe? When will you break even? When will you begin to generate a profit?
Once you’ve made the decision to proceed, here are some additional questions to guide you:
- Have you consulted with the local electricity distributor on your project and applied for an Impact Assessment?
- Have you satisfied all the eligibility conditions to be eligible for the Standard Offer Program – demonstrated site control (e.g. ownership, long-term lease), arranged financing, conducted an environmental assessment, etc.?
- Did you apply to the Ontario Power Authority for a Standard Offer Contract?
- Did you apply to the Ontario Energy Board for a generator licence to sell electricity?
- Have you considered metering and telecommunications capabilities to transmit the hourly data?
- Have you set up a separate generator account with the local electricity distributor, if necessary?
- Has your generation equipment and connection to the distribution system been approved by the Electrical Safety Authority?
How to Learn More
If you have any questions, contact the OEB’s Market Operations Hotline at 416-440-7604 or visit the following websites for more helpful information:
- Your local electricity distributor
- Ontario Power Authority (www.powerauthority.on.ca)
- Ontario Ministry of Energy (www.energy.gov.on.ca)
- Electrical Safety Authority (www.esainspection.net)